First Mexican Gold Corp. (TSX VENTURE: FMG) -
This company update is for the purpose of keeping shareholders
of First Mexican Resources informed of the Company's activities.
The Company has been very busy during 2010 advancing the Hilda's
project area (now referred to as the Guadalupe property package),
getting listed on the Venture Exchange and now planning for 2011.
There is a slight name change and the Company is now known as First
Mexican Gold Corp. utilizing the trading symbol of FMG on the TSX
Venture Exchange. The website domain name has also been changed to
www.fmgoldcorp.com
Your Board of Directors remains as Gregory Roberts, Michel Roy
(Chairman & CEO of ECU Silver Mining) and James Voisin, who is
the President & CEO with Nicole Wood as CFO. The company has
added one new board member, Robert Findlay. Mr. Findlay's
background includes extensive experience in mining equipment sales
and service, business development, management, corporate finance
and management consulting services to both public and private
companies. Recently he has served on the boards of several private
and public companies from incorporation to listing on the TSX
Venture Exchange including Auric Development Corp. Mr. Findlay is
an honours graduate from Haileybury School of Mines, 1987.
A list of 2010 activities and accomplishments is included below,
in no particular order or timeline:
1. The Company completed the initial option agreement which was
based on $1 million dollar in expenditures. Plus management
completed discussions and entered into a new Option Agreement with
International Millennium Mining Corp. (IMMC) which allows First
Mexican to increase earn-in interest to 80% of the Hilda prospects
(Hilda 30, 37, 38) and mutual area of interest. The agreement
requires the expenditure of an additional US$3 million on
exploration, $100,000 in timed cash payments and the issuance of
1.4 million shares of First Mexican over a 5 year period. This also
includes a right of first refusal on a nearby property, La
Esperanza.
2. Meetings were held with the local communities (Adjito's) and
legal agreements were signed and completed with both relevant
communities, Guadalupe Tayopa and Santa Ana.
3. A confidentiality agreement was signed with our direct
neighbour Corex Gold Corp. who are very actively exploring a
significant gold discovery contiguous to our property package.
4. The Company completed numerous small financings to continue
exploration operations and complete the Qualifying Transaction
process. The public float of First Mexican Gold Corp. now stands at
approximately 31.5 million shares post reverse takeover and a
recent financing with Canaccord Capital, the sponsoring firm. The
company would like to thank Canaccord for the key role it played
during the listing and financing process.
5. Access road development has now been extensive with over 14
km completed to the numerous exploration areas on the property.
6. The Company has been conducting an extensive systematic soil
and rock chip sampling program since early spring of 2010 with over
2000 samples assayed to date and the resultant mapping of same. In
addition the company conducted and completed a regional airborne
magnetic survey in conjunction with Corex Gold. This activity has
been conducted under the supervision of James McCrea, PGeo and Ryan
Grywal, Bsc.Geo. This work has led to numerous additional target
areas over and above the original discoveries reported in the last
shareholders update.
7. The Company completed a revised 43-101 report in Q2 2010 and
provided audited financials for the listing process.
8. The Company has been in active discussions and expects to
finalize numerous additional property package acquisitions in the
near term.
9. The Company has finalized plans for establishing a more
extensive operations camp/compound for its management and
exploration team which will include accommodation, secure core
storage & logging facilities, and equipment storage and
maintenance. Construction will begin as soon as is feasible. The
team on site now numbers 6 people with plans to increase personnel
as the exploration program ramps up.
10. The Company has planned and has mobilized a phase 2 drill
program comprised of 8 to 10 holes, recently announced.
11. The Company has planned and is preparing to begin an
extensive Induced Polarization (IP) survey and line cutting program
over what has been identified to date as 8 target areas.
History
The Company first raised capital in the spring of 2007 and
completed an option agreement with IMMC in May 2007 for the Hilda
properties. The company had originally planned to go public in late
2007 and by March 2008 this proved unsuccessful due to market
conditions. The company continued baseline exploration activities
and access road development while maintaining the current status of
the option agreement. It became evident to the Company that to
successfully go public it would have to increase its interest in
the property so this led to successful discussions with IMMC in
summer 2009 to revise the option agreement to contemplate earning
an 80% interest.
In the late summer of 2009 a three hole diamond drill program
was planned and then executed on the Hilda 30 prospect in Guadalupe
Tayopa which is some 220 kilometers SE of Hermosillo Mexico in
Sonora State. A paved road runs about 15 kilometres from the
property.
This property is bordered by Corex Gold Corp. on two sides and
in the same general area as the Mulatos mine of Alamos Gold Inc.,
Dolores mine of Minefinders Corp. Ltd., and Ocampo mine of Gammon
Gold Inc. The initial plan was to drill three parallel diamond
drill holes into an oxide occurrence that was exposed by a road cut
about one third of the way up the mountain. Poor ground conditions
interrupted the drilling of the first two holes and the third one
was completed to a design depth of 100 metres. (see highlights
below)
Due to cash constraints the samples from this drilling were sent
in the fall of 2009 to the University of Hermosillo for assay which
was conducted by a Phd. professor with the most up to date assay
equipment available. Subsequently the samples were sent for check
assay to ALS Chemex which is a qualified laboratory under
instrument 43-101 guidelines and this re-confirmed the initial
results although they remain non-compliant at this time.
Subsequent to this initial diamond drilling program an
opportunity to quickly drill an additional seven holes presented
itself so a program was designed with drilling carried out by Layne
Drilling of Hermosillo. These holes were reverse circulation holes
(RC) and on average reached a designed maximum depth of 100 metres.
These seven holes were not targeted to replicate the original three
holes but were designed to help provide strike and dip information
to increase the orientation knowledge of the discovery and aide in
our efforts to figure out where the mineralization was going and
where it was contained. From this drill testing it appears that it
is trending further to the north than originally expected as is
exhibited in results from hole RC hole #3 which is situated
furthest to the north. The RC drilling was overseen by John
Archibald BSc., P.Geo, QP. All samples were assayed by ALS
Chemex.
All holes drilled to date are near surface with open pit
potential and have all hit mineralized zones with the best
highlights outlined below:
DDH #1: 5.8 metres with 3.67 g/t Au & 753 g/t Ag
DDH #2: 15.25 metres with 2.58 g/t Au & 47 g/t Ag
DDH #3: 37.8 metres with 6.51 g/t Au & 678 g/t Ag
including 29.1 metres with 8.36 g/t Au & 900 g/t Ag
including 16.9 metres with 10.61 g/t Au & 1,416 g/t of Ag
RC hole #2: 2 metres with 1.48 g/t Au & 1330 g/t Ag
RC hole #3: 18 metres with 6.52 g/t Au & 61 g/t Ag
including 2 metres with 14.40 g/t Au & 152 g/t Ag
DDH holes #1 thru #3 are non-compliant by Canadian 43-101
standards as the initial drilling was not supervised by a Qualified
Person, drill locations were not surveyed and the exact drill-hole
collar locations were lost as a result of access road
rehabilitation and therefore are approximate. The reverse
circulation holes listed above are compliant to 43-101 standards
and were overseen by John Archibauld P.Geo.
So far it is management's assessment that it is possible we are
drilling into the cap of a larger system at depth and are only
hitting the mineralized stringers that are coming from the main
event. One of the only hematite plugged mountains in the area is
situated some 400 metres from this current drilling and is a
possible source of the mineralization. The trend of the drilled
zones is headed in the direction of the plug and further
investigation is required. All areas remain open at depth and on
strike.
Subsequent exploration work has been focused on extensive soil
and rock chip sampling and mapping program over Hilda 30, 37 &
38 properties which is ongoing presently. In addition the Company
carried out a regional airborne magnetic survey. An 8 to 10 hole
drill program has now begun while plans are being prepared for a
targeted Induced Polarization (IP) survey to identify the highest
grade zones of mineralization. Following the interpretation of the
data collected and combined with the new drill data and very
encouraging drill results that exist to date, a further exploration
drill program will be planned and executed to further delineate the
existing significant discovery and test new targets on various
areas of the property.
Management view
Management is of the opinion that the initial results we have
provided demonstrate that the area has excellent exploration
potential. Coupled with our neighbour's results, Corex Gold Corp.,
a strong regional play is starting to develop in an already
prolific gold and silver mining region that boasts projects such as
Gammon Gold's Ocampo, Minefinder's Dolores and Alamos Mulatos
projects.
Corex Gold Corp. has been consistently reporting good results
and has approximately 44 million shares outstanding with a market
capitalization of approximately $35 million. It is our belief that
we may have an important higher grade feeder system for the
mineralization of this area. First Mexican Gold has approximately
31.5 million shares outstanding and based on the 35 cents per share
recent financing this will yield an approximate market
capitalization of $11 million.
It is the view of management that First Mexican Gold has the
potential to further develop and outline a significant discovery on
this property package as indicated by the above information
outlined in this update letter. To date, our higher grade
intercepts compare favourably with Corex Gold Corp. results and
provide investors a very good early entry opportunity to
participate in what could be a potential significant gold and
silver discovery in what is a secular bull market for precious
metals that should continue for many years yet.
On behalf of existing First Mexican shareholders, management
successfully negotiated a special warrant provision during the
recent reverse takeover process that allows those original risk
investors to participate in the upside success of the Company going
forward. As result driven milestones are attained by the
corporation the Special Warrants are released and become
exercisable at 10 cents per share. Management wants to sincerely
express our gratitude to our original shareholders of First Mexican
Resources for their support and contributions over these last 3
years.
The senior management would like to welcome shareholders of
Auric Development Corp.
Jim Voisin, President & CEO
First Mexican Gold Corp.
We seek safe harbour.
This news release includes certain forward-looking statements or
information. All statements other than statements of historical
fact included in this release, including, without limitation,
statements regarding plans for the completion of a private
placement financing and other future plans and objectives of the
Company are forward-looking statements that involve various risks
and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's plans or expectations include market
prices, availability of capital and financing, general economic,
market or business conditions, regulatory changes, timeliness of
government or regulatory approvals and other risks detailed herein
and from time to time in the filings made by the Company with
securities regulators. The Company expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise except as otherwise required by applicable securities
legislation.
Contacts: First Mexican Gold Corp. Jim Voisin President &
CEO Toll Free: 1-800-366-8566 (Canada & USA)
www.fmgoldcorp.com
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